Frequency Holdings Shifts ReachOut to SaaS Licensing Model to Boost Cybersecurity Accessibility for Small Businesses

Frequency Holdings Inc. announced that its subsidiary ReachOut Digital Intelligence is undergoing a strategic transition from traditional managed services to a high-margin, SaaS-driven licensing framework designed to improve recurring revenue predictability and long-term gross margins. This shift represents a significant component of ReachOut's broader 2026 strategic roadmap, positioning the company as a cybersecurity-first provider focused on AI automation, cybersecurity protection licensing, and AI-enabled compliance readiness.

The new model implements a suite of proprietary and third-party technology tools under a monthly licensing structure, including AI-powered cybersecurity protection, automated compliance readiness tooling for standards such as CMMC, HIPAA, and NIST, AI-enabled business intelligence and automation modules, endpoint and cloud security platforms, and predictive support automation. These offerings will be delivered under a unified "Licensed Protection" framework, replacing the low-margin, service-heavy MSP structure that has dominated the industry for over a decade.

"The MSP model is fundamentally broken," said Rick Jordan, CEO of Frequency and ReachOut. "Labor-heavy service delivery has reached the limits of scalability, while cybersecurity and AI require a productized, predictable, and technology-first approach. By shifting ReachOut to a SaaS licensing subscription model, backed by human support, we're aligning the business with the future of the industry." This strategic shift reflects Jordan's longstanding mission of "Cybersecurity for All," aiming to close the protection gap between large enterprises and the SMBs that form the backbone of the U.S. economy.

By transforming ReachOut into a SaaS-driven, AI-powered platform, the company is making advanced cybersecurity and compliance readiness accessible, affordable, and operationally realistic for smaller businesses. This approach democratizes protection, enabling SMBs to adopt modern cyber defense capabilities without hiring large teams or deploying complex infrastructure, while giving ReachOut a scalable model with stronger recurring margins. The transition positions ReachOut to operate with significantly reduced direct labor load, higher gross margins from recurring monthly licensing, less operational variability, more predictable revenue cycles with higher lifetime values, and a scalable foundation for enterprise and federal expansion.

While ReachOut's model is shifting toward automation and SaaS licensing, the company is maintaining a critical layer of human-backed support to ensure enterprise-grade reliability for SMB clients. ReachOut's engineers and security analysts remain embedded behind every productized service, providing rapid response, expert oversight, and guidance when customers need it most. This hybrid approach ensures that SMBs receive the kind of protection historically reserved for large enterprises without the cost burden or operational complexity of a traditional MSP relationship.

As ReachOut evaluates future MSP acquisitions, it plans to leverage its technology stack as a force multiplier by injecting the SaaS licensing model directly into each acquired company. Management believes this creates a significant uplift opportunity, enabling the business to expand the revenue base of any acquisition by an estimated 2–5X within 24 months post-acquisition. This acceleration is driven by transforming low-margin service contracts into high-margin, recurring licensing agreements and deploying AI-driven cybersecurity and automation tools across the acquired customer base.

The company expects the model shift to materially benefit long-term margin structure as adoption grows throughout 2026 and beyond. By repositioning ReachOut under a SaaS-first model, Frequency is aligning its subsidiary architecture with its core vision of building a technology-led platform that uses AI, automation, and cybersecurity intelligence to solve modern operational and compliance challenges. Additional information about the company can be found at https://www.frequencyhold.com and regulatory filings at https://www.sec.gov.